TITLE

Analyzing the Initial Public Offering (IPO) Prospectus:

Unveiling the Strategic Insights Of Octopus Digtal ltd.
Submitted by:
MUHAMMAD OMAR JAMIL
AMNA ZAHEER
HASNAT ABBASI
HAFSA ABDUL RAHEEM
A&F 7-A

Submitted To:
MS. SHUMAILA ISRAR
ADVANCE FINANCIAL MANAGEMENT
DEPARTMENT OF MANAGEMENT SCIENCES
BAHRIA UNIVERSITY, ISLAMABAD

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Table of Contents
Introduction to the company......................................................................................................................3
UNDERSTANDING IPO............................................................................................................................4
Companies opt for an IPO for various reasons, including:.....................................................................4
 Access to Capital:.........................................................................................................................4
 Enhanced Visibility and Credibility:.........................................................................................4
 Liquidity for Existing Shareholders:.........................................................................................4
Benefits of an IPO for the company and its stakeholders include:.....................................................4
1. Capital Infusion:..........................................................................................................................4
2. Market Valuation:.......................................................................................................................4
3. Employee Incentives:...................................................................................................................5
Risks associated with IPO.......................................................................................................................5
1. Market Volatility:........................................................................................................................5
2. Regulatory Compliance:..............................................................................................................5
3. Loss of Control:............................................................................................................................5
STEPS IN IPO..............................................................................................................................................5
Step 1: Select an investment banker what do investment banks do in an IPO?................................5
What do investment banks do in an IPO?.........................................................................................5
Would the sale be on an underwritten or best-efforts basis?..........................................................5
Best-efforts sale....................................................................................................................................5
Underwriting issue...............................................................................................................................6
Step 2:File registration document with SEC.........................................................................................6
1. Jurisdiction...................................................................................................................................6
2. Registration..................................................................................................................................6
3. Prospectus.....................................................................................................................................6
Step 3: Choose price range for a preliminary prospectus....................................................................6
Step 4: The Roadshow and Book-Building............................................................................................7
Roadshow..............................................................................................................................................7
Quiet period..........................................................................................................................................7
Book-building.......................................................................................................................................7
Oversubscribed....................................................................................................................................7
Step 5: Set the final offer price in the final prospectus........................................................................7
Setting the Offer Price.............................................................................................................................7
PRE IPO PREPARATION:........................................................................................................................8

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 1. Financial Restructuring:.................................................................................................................8
2. Inspection of documents and contracts:........................................................................................8
3. Hiring Underwriters:.......................................................................................................................8
4. Appointment of Collection Bank:...................................................................................................8
5. Legal Compliance:...........................................................................................................................9
6. Due Diligence:...................................................................................................................................9
7. Engagement with Regulatory Authorities:....................................................................................9
8. Corporate Governance Enhancement:..........................................................................................9
VALUATION:..............................................................................................................................................9
1. Comparable Company Analysis (CCA):.......................................................................................9
2. Discounted Cash Flow (DCF) Analysis:.......................................................................................10
3. Precedent Transactions Analysis:................................................................................................10
4. Book Building Process:..................................................................................................................10
a. Strategic advantage underpinned in forecasts:.......................................................................11
b. Strong Management:.................................................................................................................11
c. Parent Company History:.........................................................................................................11
d. Emerging Player in Cloud-Based Solutions:...........................................................................11
OFFERING STRUCTURE:.....................................................................................................................12
Salient features of the issue including method of offering:............................................................12
Principal purpose of the issue:..........................................................................................................12
Dashboard based IPs:........................................................................................................................13
In case the Strike Price is determined above the Floor Price:.......................................................13
Basis of Allotment of Shares:............................................................................................................13
Refund of Margin Money:.................................................................................................................14
Issue and credit of share certificates:...............................................................................................14
Regulatory Approval.................................................................................................................................15
1. Approval of Prospectus by PSX....................................................................................................15
2. Compliance with SECP Regulations:...........................................................................................15
3. Listing Rules of the PSX:..............................................................................................................15
4. Disclosure and Transparency:......................................................................................................15
5. Corporate Governance Standards:..............................................................................................15
MARKETING AND ROADSHOW:........................................................................................................16
1. Engagement with Investment Banks:..........................................................................................16
2. Roadshows:.....................................................................................................................................16

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 3. Investor Presentations:..................................................................................................................16
4. Media and Public Relations:.........................................................................................................17
5. Digital Marketing:.........................................................................................................................17
6. Engagement with Institutional Investors:...................................................................................17
SUBSCRIPTION AND ALLOTMENT:..................................................................................................18
• Registration Period:............................................................................................................................18
• Bid Requirements:...........................................................................................................................18
• Handling Oversubscription:...........................................................................................................18
• Share Allotment:..............................................................................................................................18
• Refunding Unsuccessful Bidders:..................................................................................................18
LISTING & TRADING:...........................................................................................................................18
Listing Process:......................................................................................................................................18
Listing Date:...........................................................................................................................................19
Listing Debut:.........................................................................................................................................19
Trading Performances:.........................................................................................................................19
1. Profits and Earning Ratios:......................................................................................................19
2. Margins:......................................................................................................................................20
POST-IPO PERFORMANCE:.................................................................................................................20
1) Utilizing the IPO Proceeds............................................................................................................20
2) Revenue Stream Operations.........................................................................................................20
3) Market and Competitors Risk......................................................................................................21
4) Regulatory Risk Mitigation..........................................................................................................21
5) Capital Market Risk and Share Price Movement......................................................................21
6) COVID-19 Risk & Under-Subscription Risk Mitigation...............................................................21
7) Managing Exchange Rate Risk....................................................................................................21
8) Marketing and Sales Cost.............................................................................................................21
9) Intellectual Property Creation.....................................................................................................22
CONCLUSION:.........................................................................................................................................22

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Introduction to the company

Octopus Digital Limited is a technological service firm and a wholly owned subsidiary of
Avanceon Limited, based in Lahore, Pakistan. Octopus Digital Limited's principal business is to
provide Advanced Monitoring System (AMS) services to a wide range of local and international
clients. These services offer a wide range of information technology-enabled solutions, such as
online data and information storage, employee efficiency monitoring and review, cost, and
production efficiency monitoring, plant and machinery maintenance, and the sale and trade of
associated software and equipment.

In Pakistan's competitive technology-oriented firm landscape, Octopus Digital Limited stands

out as a significant competitor among notable entities such as Systems Limited (SYS), Netsol
Technologies Limited (NETSOL), TRG Pakistan Limited (TRG), and its parent company,
Avanceon Limited (AVN). Although these businesses compete in comparable industries, they
are not direct competitors of Octopus Digital Limited.

Octopus Digital Limited strives to seek out a market segment by leveraging technology to
improve operational efficiency and deliver creative solutions. The company's dedication to
quality services, technological innovations, and strategic alliances distinguishes it as a
prospective player in the rapidly changing field of digital services.

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UNDERSTANDING IPO
An Initial Public Offering (IPO) is the process by which a private company makes its shares
available to the public for purchase for the first time, allowing investors to buy ownership
holdings in the company. This move from a privately held corporation to a publicly listed firm
entails issuing shares on a stock exchange, such as the Pakistan Stock Exchange (PSX),
where they can be purchased and sold by investors.
When a company reaches a stage in its growth process where it believes it is mature enough for
the rigors of SEC regulations along with the benefits and responsibilities to public shareholders,
it will begin to advertise its interest in going public.

Typically, this stage of growth will occur when a company has reached a private valuation of
approximately $1 billion, also known as unicorn status.

Companies opt for an IPO for various reasons, including:

 Access to Capital:
One of the primary motivations for going public is to raise capital for business expansion,
research and development, debt repayment, or other strategic initiatives. By selling shares to the
public, companies can access a larger pool of investors and raise funds.

 Enhanced Visibility and Credibility:

Going public can increase a company's visibility and credibility in the market. It can attract
attention from customers, suppliers, and potential business partners, enhancing the company's
goodwill.

 Liquidity for Existing Shareholders:

Existing shareholders, such as founders, employees, and early investors, can monetize their
investments by selling shares in the public market. This liquidity can provide financial flexibility
to the stakeholders.

Benefits of an IPO for the company and its stakeholders include:

1. Capital Infusion:
IPOs provide a significant influx of capital that can fuel growth, fund expansion plans, and
strengthen the company's financial position.

2. Market Valuation:
Going public allows the company to establish a market valuation based on investor demand and
market conditions, which can enhance its credibility and attractiveness to potential partners and
acquirers.

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 3. Employee Incentives:
Publicly traded companies can offer stock options and equity-based compensation to employees,
aligning their interests with the company's performance and fostering employee retention and
motivation.

Risks associated with IPO

1. Market Volatility:
Publicly traded companies are subject to market fluctuations, which can impact stock prices and
investor sentiment.

2. Regulatory Compliance:
Public companies must adhere to stringent regulatory requirements, such as financial reporting,
disclosure obligations, and governance standards, which can increase administrative burdens and
costs.

3. Loss of Control:
Going public may lead to a dilution of ownership and control for existing shareholders,
including founders and early investors, as the company opens up to a broader investor base.

STEPS IN IPO
Step 1: Select an investment banker what do investment banks do in an IPO?

The first step of IPO is to select an investment banker which determines the preliminary offering
price, or price range, for the stock and the number of shares to be sold. The bank’s reputation and
experience in the company’s industry are critical in convincing potential investors to purchase
the stock at the offering price. Second, the investment bank sells the shares to its existing
clients, which include a mix of institutional investors and retail (that is, individual) customers.

What do investment banks do in an IPO?

The investment bank, through its associated brokerage house, has an analyst “cover” the stock
after it is issued.

This analyst regularly distributes reports to investors describing the stock’s prospects, which will
help to maintain an interest in the stock. The Analysts increase the likelihood that there will be a
liquid secondary market for the stock and that its price will reflect the company’s true value.

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Would the sale be on an underwritten or best-efforts basis?

Best-efforts sale

The bank does not guarantee that the securities will be sold or that the company will get the cash
it needs, only that it will put forth its “best efforts” to sell the issue.

Underwriting issue
The company does get a guarantee: The bank agrees to buy the entire issue and then resell the
stock to its customers. Therefore, the bank bears significant risks in underwritten offerings.

Step 2:File registration document with SEC

Sales of new securities, and sales in the secondary markets, are regulated by the Securities and
Exchange Commission. There are four primary elements of SEC regulation.

1. Jurisdiction

The SEC has jurisdiction over all public offerings.

2. Registration

Newly issued securities (stocks and bonds) must be registered with the SEC at least 20 days
before they are publicly offered.

The registration statement provides financial, legal, and technical information about the company
to the SEC. A prospectus summarizes all information for investors.

The SEC’s lawyers and accountants analyze both the registration statement and the prospectus; if
the information is inadequate or misleading, the SEC will delay or stop the public offering.

Among its disclosures, show the proposed number of shares to be sold (including a breakdown
between shares sold by the company and shares sold by current stockholders, including the
founders and investors) and a range of possible offering prices (the prices at which the first
investors may purchase the stock).

3. Prospectus

After the SEC declares the registration to be effective, new securities may be advertised, but all
sales must be accompanied by the prospectus.

A preliminary prospectus, which is also called a “red herring” prospectus, may be distributed to
potential buyers during the 20-day waiting period after the registration is effective, but no sales
may be finalized during this time.

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Step 3: Choose price range for a preliminary prospectus

The “red herring” prospectus (so-called because it has a standard legal disclaimer printed in red
across its cover) contains all the key information that will appear in the final prospectus except
the final price, which is generally set after the market, closes the day before the new
securities are offered to the public. It includes an approximate price range for the stock to be
issued.

Step 4: The Roadshow and Book-Building

After the registration statement has been filed, the senior management team, the investment
banker, and the company’s lawyers go on a roadshow.

Roadshow

The management team will make three to seven presentations each day to potential institutional
investors, who typically are existing clients of the underwriters.

The typical roadshow may last 10 to 14 days, with stops in 10 to 20 different cities.

Quiet period

Management cannot provide any information that is not in the registration statement. The quiet
period begins when the registration statement is made effective and lasts for 40 days after the
stock begins trading. The purpose is to create a level playing field for all investors by
ensuring that they all have access to the same information. After each presentation, the
investment banker asks the investor for an indication of interest based on the offered price range
shown in the registration statement. The investment banker records the number of shares each
investor is willing to buy, which is called book-building.

Book-building

The willingness of the investor to buy a specific number of shares is based on the offered price
range shown in the registration statement.

As the roadshow progresses, an investment bank’s “book” shows how demand for the offering is
building. Many IPOs are oversubscribed

Oversubscribed

Investors wishing to purchase more shares than are available are called an oversubscription of
shares. The investment bank will allocate shares to the investors on a pro-rata basis. If demand
is high enough, the banks may increase the offering price. If demand is low, they will either
reduce the offering price or withdraw the IPO.
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Step 5: Set the final offer price in the final prospectus
The final price is generally set after the market closes the day before the new securities are
offered to the public.

Setting the Offer Price

There are two situations:

 A company knows how many shares it plans to sell

 It knows how much cash it needs to raise.

PRE IPO PREPARATION:

In preparation for the Initial Public Offering (IPO), Octopus Digital Limited undertook several
crucial steps to ensure a successful and compliant offering. Here are the key steps the company
took in the pre-IPO preparation process:

1. Financial Restructuring:
Octopus Digital Limited conducted a thorough financial restructuring to ensure that its financial
statements were in order and compliant with regulatory requirements. This involved auditing
financial records, preparing financial statements, and ensuring transparency and accuracy in
financial reporting.
The auditor of the Company, EY Ford Rhodes, has not given any qualified opinion on the
financial statements of the Company in the past three financial years.

2. Inspection of documents and contracts:

Copies of the Memorandum and Articles of Association, the Audited Financial Statements, the
Auditor’s Certificates, the Information Memorandum, and copies of the agreements referred to in
draft Prospectus may be inspected during usual business hours on any working day at the
registered office of the Company from the date of publication of draft Prospectus until the
closing of the subscription list.

3. Hiring Underwriters:
The company appointed BMA Capital Management Limited as the Book Runner/ Lead Manager
for the issue. The Book Runner has underwritten 27,350,000 shares being offered for
subscription through book building representing 100% of the Issue. BMA played a vital role in
the IPO process by helping the company determine the offering price, underwriting the shares,
and ensuring a smooth offering process.
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 4. Appointment of Collection Bank:
Meezan Bank Limited has been appointed as the Banker for the book-building portion of the
issue. For this purpose, Meezan Bank Limited has opened an account titled “Octopus Digital -
BOOK BUILDING”, at its [KSE Branch], Karachi. It is responsible for keeping and maintaining
the Bid Amount in the said account.

5. Legal Compliance:
Octopus Digital Limited focused on ensuring legal compliance at every stage of the IPO process.
This included working closely with its legal advisor, Cheema and Ibrahim Advocates and
Corporate Counsel, to navigate regulatory requirements, drafting the prospectus with the help of
Securities and Exchange Commission of Pakistan (SECP) guidelines, and obtaining necessary
approvals from regulatory authorities.

6. Due Diligence:
The company conducted extensive due diligence to assess its business operations, financial
performance, legal compliance, and potential risks. These involved reviewing contracts,
verifying assets and liabilities, evaluating market positioning, and identifying any areas that
needed to be addressed before the IPO.

7. Engagement with Regulatory Authorities:

Octopus Digital Limited engaged proactively with regulatory authorities such as the SECP and
Pakistan Stock Exchange (PSX) to ensure that all regulatory requirements were met. This
included submitting necessary documents, obtaining approvals, and adhering to disclosure and
reporting standards.

8. Corporate Governance Enhancement:

The company focused on enhancing its corporate governance practices to instill investor
confidence. The Company shall comply with all the rules and regulations applicable to the
Company concerning the Listed Companies (Code of Corporate Governance) Regulations, 2019.
This involved strengthening board oversight, improving transparency in decision-making
processes, and implementing robust internal controls.
By meticulously following these steps, Octopus Digital Limited positioned itself for a successful
IPO, demonstrating its commitment to transparency, compliance, and investor protection.

VALUATION:
Before the IPO, Octopus Digital Limited would have been valued using various methods to
determine the offering price of its shares to the public. Valuation is a critical aspect of the IPO
process as it helps in setting a fair price that reflects the company's worth and potential for
investors. Some common methods used for valuing a company before an IPO includes:

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 1. Comparable Company Analysis (CCA):
This method involves comparing the financial metrics of the company with similar publicly
traded companies in the same industry. By analyzing factors such as revenue, earnings, growth
rates, and multiples like Price-to-Earnings (P/E) ratio, Price-to-Sales (P/S) ratio, and Enterprise
Value-to-EBITDA (EV/EBITDA), a valuation range can be derived.

2. Discounted Cash Flow (DCF) Analysis:

DCF analysis estimates the present value of the company's future cash flows by discounting
them back to their current value. This method takes into account the company's projected cash
flows, growth rates, and the risk associated with the business to determine its intrinsic value.

CF 1 CF 2 CF n
DCF= + +
(1+ r)1 (1+ r)2 (1+ r )n

where:

CF1=the cash flow for year one

CF2=the cash flow for year two

CFn=the cash flow for additional year

Sr=the discount rate

3. Precedent Transactions Analysis:

This method involves analyzing the valuation multiples of similar companies that have been
acquired or have gone public recently. By looking at the transaction values of these comparable
companies, a valuation benchmark can be established for the company going public.

EV
Estimated EV =EBITDA x multiple
EBITDA

4. Book Building Process:

In the book-building process, institutional investors and high-net-worth individuals submit bids
indicating the price and quantity of shares they are willing to purchase. Based on these bids, the
final price of the shares is determined, reflecting the demand from investors.

Octopus Digital utilized the book-building process, where investors bid for shares at various
prices, with the issuer setting a Floor Price as the minimum bid. The Book Runner maintained an
order book of bids to determine the Strike Price using the Dutch Auction Method. This method
involves arranging all bid prices in descending order along with the corresponding number of
shares bid for at each price level. The Strike Price is gradually lowered until the total number of

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shares offered in the book-building process are subscribed, ensuring a transparent and market-
driven price discovery process.

The Dutch Auction Method combines elements of competitive bidding with price discovery,
aligning the interests of both issuers and investors. By eliciting bids from investors at various
price levels, it gauges the demand for the shares being offered. Lowering the price incrementally
maximizes the likelihood of full subscription and achieves fair value for both parties involved in
the book-building process. Overall, this method fosters transparency and efficiency in
determining the strike price, contributing to a successful issuance of shares.

The Ordinary Shares of Octopus are being issued at a Floor Price of PKR 29/- per share which is
at a premium of PKR 19/- per share Ordinary Share to the face value of PKR 10.00/- per
Ordinary Share. The Lead Manager has reviewed the business performance of the Company and
in their opinion, the Floor Price of PKR 29/- per share is justified based on the following:

a. Strategic advantage underpinned in forecasts:

Avanceon is a key player in the machinery automation industry. It brings technical efficiencies in
manufacturing systems along with the application of cost-reduction techniques causing the
majority of manufacturers to opt for their systems and technology. Octopus, being the arm of
Avanceon and one of the leading manufacturing automators in the industry allows it to have an
already established clientele.

b. Strong Management:
Octopus’s management consists of a competitive set of individuals with a globally diverse
experience. The board is comprised of seven directors. This board of directors possesses a wide
plethora of skills and experience in the manufacturing, information technology, and electrical
engineering sectors. A futuristic mindset and vision allow the Company to take bold steps
towards technological advancement.

c. Parent Company History:

Avanceon is the leading provider of industrial automation, process control and systems
integration as well as proprietary energy management solutions and support services. It has a
strong market footprint and has over 17 years of operational history in Pakistan. Avanceon also
has managed to develop 16 key partnerships worldwide.

d. Emerging Player in Cloud-Based Solutions:

Octopus is an emerging player in provision of cloud-based solutions at a large scale in Pakistan.
The Company has not only developed a strong skill set but also a strong rapport with domestic as
well as international market participants over the past couple of years. This will allow the
Company to retain its market position despite introduction of new market participants as any new
player will have to pass through the learning curve of domestic market allowing ample lead time
to the Company to gear up for possible competition.
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In summary, Factors considered in the valuation of Octopus Digital Limited before the IPO
included:

 Financial performance and growth potential of the company

 Market trends and industry outlook
 Competitive landscape and positioning within the industry
 Intellectual property and technology assets
 Management team and track record
 Regulatory environment and risks
 Future growth strategies and expansion plans

OFFERING STRUCTURE:
Octopus Digital Limited (OCTOPUS) launched an Initial Public Offering (IPO), offering
27,350,000 Ordinary Shares, which equated to 20.00% of its post-IPO paid-up capital. These
shares held a face value of PKR 10/- each and were offered through a 100% book-building
method. The IPO was initiated with a Floor Price set at PKR 29/- per share, allowing for a
maximum price band of up to 40% above this floor.

Under the book-building process, investors were permitted to bid for the entire Issue Size, with
the Strike Price being the level at which the entire Issue was subscribed. Successful bidders
initially received 75% of the Issue size (20,512,500 shares), while the remaining 25% (6,837,500
shares) were offered to retail investors/general public. If any shares remained unsubscribed in the
retail portion, they were allocated to successful bidders on a pro-rata basis.

Additionally, investors were required to provide an undertaking, along with their application,
committing to subscribe to any unsubscribed retail shares. Bid money was held until the
allotment process was complete. The Floor Price of PKR 29/- had a maximum Price Band of
40% above, ensuring a balanced pricing mechanism. A Supplement to the Prospectus, detailing
the Strike Price, Offer Price, dates of the Public Subscription, and category-wise break-up of
Successful Bidders, was published within three working days of the closing of the Bidding
Period.

Salient features of the issue including method of offering:

Size of offering 27,350,000 shares

Floor Price PKR 29/- per share

Total Capital to be raised at the Floor PKR 793,150,000/-

Price

Method of Offering 100% Book Building Method

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 Principal purpose of the issue:
The Company requires funding of PKR 793.15 million to develop various Digital Dashboard
platforms to expand its services suite to industry 4.0, which is an industrial revolution that
includes automation of traditional manufacturing and industrial practices. The target markets for
these services will be Pakistan, the Middle East, and the United States. The plan is to build
twenty-nine (29) independent intellectual properties including marketing and selling of these IPs.
The IPs that the Company aims to build shall be under the following categories:

Dashboard based IPs:

These objective-specific dashboards as follows will be prepared for industrial and manufacturing
sectors, which will provide an at-a-glance view of key performance indicators relevant to a
particular objective or business process:

 Industry vertical based IP

 Function-based IP
 Utilities based IP
 Maintenance Based IP
 Fuel retail specialty-based IP

Utilization and sources of the funds required:

There are three components of proceed utilization as follows:

a) Creation of intellectual property: This includes the cost of human resources such as software
engineers, technical experts, etc. who will be hired. The estimation of cost is carried out on a
project-hour basis. On average, each Intellectual Property will cost c. USD 150,000;

b) HR Cost of Marketing: This includes the human resource cost of the marketing team which will
be hired locally.

c) HR Cost of Sales: This category includes the procurement of a sales team, from Pakistan, for
targeting specific industries. The cost is based on the human resource cost required to conduct
sales of specific intellectual property.

The IPO proceeds to be used for meeting: creation of intellectual properties, marketing and sales
expenditures shall be utilized within Pakistan

In case the Strike Price is determined above the Floor Price:

Any excessive funds, in case the Strike Price is determined above the Floor Price, would be
utilized either for creating additional IPs or as directed by the Board of Directors.
15
There is also the under-subscription risk; the issue of octopus may be under-subscribed due to
lack of interest on the part of the investors. The book-building process shall be considered
cancelled if the company does not receive bids for the number of shares allocated under the
book-building portion or if the company does not receive at least 40 bids.

Basis of Allotment of Shares:

In the allocation process for the IPO shares, bidders could place bids for the entire Issue size,
with the Strike Price determined by the Dutch Auction Method. Successful bidders were
provisionally allotted 75% of the Issue size, equivalent to 20,512,500 Ordinary Shares. Bids
needed to be at or above the Strike Price to be considered successful, with priority given to
higher bids.

For bids above the Strike Price, 75% of the shares were provisionally allocated at that price, with
any excess bid amount refunded. Bidders who placed bids at the Strike Price received a
proportionate allotment of 75% of their bid shares. Bids below the Strike Price did not qualify
for allocation, and the Margin Money was refunded.

Final allotment occurred after assessing the response to the Retail Portion of the Issue. In case of
under subscription in the retail portion, the unsubscribed shares were allocated to successful
bidders on a pro-rata basis, with any excess funds refunded. Final allotment from the Book
Building portion happened after subscription and receipt of full payment from successful
bidders, with shares issued simultaneously to retail investors and credited to their respective CDS
Accounts.

If the issue is over-subscribed in terms of amount only, then allotment of shares shall be made
in the following manner:

 First preference will be given to the applicants who applied for 500 shares
 Next preference will be given to the applicants who applied for 1,000 shares
 Next preference will be given to the applicants who applied for 1,500 shares
 Next preference will be given to the applicants who applied for 2,000 shares
 After allotment of the above, the balance shares, if any, shall be allotted on a pro-rata
basis to the applicants who applied for more than 2,000 shares.

Refund of Margin Money:

The Bidders who have made Bids below the Strike Price shall not qualify for allotment of
securities and the Book Runner shall intimate their respective banks for unblocking, where
required, their Bid Money within one (1) working day of the close of the bidding period as
required under regulation 9(13) of the PO Regulations and the refunds, where required to such
bidders shall be made within three (3) working days from the close of the bidding period.

16
The bid money of bidders who have undertaken to subscribe to the unsubscribed retail portion
shall remain deposited or blocked till the allotment of shares of the unsubscribed retail portion, if
any, to them on a pro-rata basis.

Issue and credit of share certificates:

Within ten (10) working days of the closing of public subscription period, the shares shall be
allotted, issued and credited against the accepted and successful applications and the subscription
money of the unsuccessful applicants shall be unblocked/refunded, as required under regulation
11(4) of the PO Regulations. Shares will be issued only in the book-entry form and will be
credited into the respective CDS Accounts of the successful applicants. Therefore, the applicants
must provide their CDS Account Number in the Shares Subscription Applicant.

Regulatory Approval
1. Approval of Prospectus by PSX
The Pakistan Stock Exchange (PSX) has approved the Prospectus of Octopus Digital Limited, as
per letter No. [..] dated [..], in accordance with Listing Regulations.

2. Compliance with SECP Regulations:

If the Company fails to meet any regulatory requirements of SECP or PSX, it may be moved to
the Defaulter Segment of PSX, which could disrupt the trading of its shares and possibly lead to
a trading suspension.Considering the sponsor's seven-year track record of adherence to PSX and
SECP regulations, it is highly improbable that Octopus Digital Limited would fail to comply
with SECP and PSX requirements.

3. Listing Rules of the PSX:

The Company has submitted an application to PSX for permission to trade and list its shares. If
not approved within 21 days, the Company will refund the application money without interest. If
not refunded within eight days, the Directors will be jointly and severally responsible for
repayment, with an additional surcharge. The application money will be deposited in a separate
bank account until the Company is no longer liable.

4. Disclosure and Transparency:

Octopus Digital Limited is committed to providing comprehensive disclosure of its financial
performance, business operations, risks, and prospects in its prospectus. Ensuring transparency
and accuracy in these disclosures is crucial for maintaining investor confidence and complying
with regulatory requirements. This thorough approach to disclosure underscores the company’s
dedication to upholding high standards of corporate governance and fostering trust among its
stakeholders.

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 5. Corporate Governance Standards:
Octopus Digital Limited is committed to adherence to the Listed Companies (Code of Corporate
Governance) Regulations, 2019, ensuring integrity, accountability, and transparency in its
operations. The company fosters ethical business practices and robust internal controls. It
maintains clear communication with stakeholders, provides accurate disclosures, and ensures
financial statements reflect fair performance. Compliance with the Code includes risk
management strategies and a well-structured board of directors. Octopus Digital Limited aims to
enhance investor confidence, protect shareholder value, and contribute to financial market
stability and growth.

MARKETING AND ROADSHOW:

To market the Initial Public Offering (IPO) and generate interest and demand for its shares,
Octopus Digital Limited employed various strategies, including conducting roadshows and
engaging with potential investors. Here is how the company marketed the IPO:

1. Engagement with Investment Banks:

Octopus Digital Company is partnering with an investment banking firm to execute its Initial
Public Offering (IPO). The firm will advise on valuation, structuring, and pricing strategies,
as well as prepare necessary documentation and liaise with regulatory authorities. They will
also help market the IPO to potential investors through roadshows and presentations. The
firm will act as the underwriter or lead manager, managing the allocation and distribution
process. They will coordinate the offering timeline, pricing, and allocation of shares to
investors. This strategic partnership aims to maximize the company's value and ensure a
successful debut in the public markets, providing Octopus Digital Company with the
necessary expertise and resources to navigate the complexities of the IPO process.

2. Roadshows:
Octopus Digital Company's Roadshow for IPO includes
 A series of presentations and meetings to showcase the company's investment
opportunity.
 Starts with an introductory presentation by the management team, highlighting the
company's business model, financial performance, growth prospects, and competitive
advantages.
 Follows with one-on-one meetings and group presentations with potential investors.
 Conducted in major financial centers and key investor hubs for broad exposure.

 Emphasizes the company's commitment to transparency, corporate governance, and

shareholder value creation.
 Aims to build rapport and trust with potential investors, addressing any concerns or
reservations.
 Plays a critical role in generating interest and demand for Octopus Digital Company's
IPO.

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 3. Investor Presentations:
Octopus Digital Limited organized investor presentations for its Initial Public Offering (IPO),
providing in-depth insights into the company's operational framework, financial achievements,
competitive landscape, and growth initiatives. These presentations aimed to provide investors
with a comprehensive understanding of the company's value proposition and anticipated benefits.
They emphasized the company's strategic direction, market positioning, and future expansion
avenues, fostering informed decision-making. The presentations also elucidated the company's
current standing and growth trajectory, instilling confidence in investors about the long-term
viability and profitability of their investment.

4. Media and Public Relations:

Octopus Digital Company conducted a strategic media and public relations campaign before its
Initial Public Offering (IPO) to generate awareness, build excitement, and foster positive
sentiment among stakeholders. The campaign involved press releases, interviews, social media
engagement, and targeted outreach to key industry influencers and media outlets. Press releases
disseminated information about the IPO, while interviews with executives and spokespersons
conveyed the company's unique value proposition, market positioning, and growth prospects.
Social media platforms like Twitter, LinkedIn, and Facebook were used to share updates and
engage with stakeholders. Targeted outreach efforts with industry analysts, financial journalists,
and thought leaders secured favorable coverage, bolstering the company's reputation and
establishing itself as a credible investment opportunity. Overall, Octopus Digital Company's
media and public relations efforts contributed to the success of its IPO.

5. Digital Marketing:
Octopus Digital Company's Digital Marketing Strategy for IPO
 Implemented a comprehensive digital marketing strategy to maximize visibility,
generate investor interest, and drive engagement.
 Created a dedicated IPO microsite or landing page, providing essential details about
the IPO.
 Leveraged social media platforms for amplifying IPO messaging and engaging with
the audience.
 Utilized email marketing as a direct and personalized communication channel to
engage with investors and stakeholders.
 The strategy was characterized by strategic planning, compelling storytelling, and
seamless integration across channels.
 The goal was to raise awareness, generate demand, and position Octopus Digital
Company for a successful public market debut.

6. Engagement with Institutional Investors:

Octopus Digital Company's Engagement Strategy for Institutional Investors
 Organized roadshows and investor presentations to provide exclusive access to the
company's management team, senior executives, and investment banking firm
representatives.

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  Conducted personalized one-on-one meetings to address specific inquiries, concerns,
and investment preferences of each investor.
 Leveraged the expertise and industry relationships of its investment banking partners
to facilitate introductions and negotiations with institutional investors.
 Emphasized its commitment to transparency, corporate governance, and shareholder
value creation to position itself as an attractive investment opportunity.
 This commitment to open communication, trust-building, and alignment of interests
contributed to the cultivation of strong relationships with institutional investors.

SUBSCRIPTION AND ALLOTMENT:

Octopus Digital Limited meticulously orchestrated its Initial Public Offering (IPO) subscription
process to ensure it was transparent, accessible, and fair to all investors. Here's how the
subscription process unfolded:

• Registration Period:
The IPO registration window spanned five consecutive working days, beginning from the 1st
XXX 2021 and concluding on the 7th XXX 2021. This timeframe provided ample opportunity
for eligible investors to register and submit their bids for Octopus Digital Limited's shares.

• Bid Requirements:
To participate in the IPO, both individual and institutional investors were required to place bids
starting from a minimum amount of PKR 1,000,000/-. Bids could be placed either at the "Limit
Price" or as a "Step Bid," with a minimum bid size of PKR 1,000,000/-.

• Handling Oversubscription:
In case of oversubscription, where demand surpassed available shares, Octopus Digital Limited
had mechanisms in place to ensure fair share allocation. The prospectus detailed the allocation
process to guarantee equitable distribution among investors.

• Share Allotment:
Final share allotments were determined based on the response to the Retail Portion of the Issue.
Should the retail portion be undersubscribed, the remaining shares were allocated to successful
bidders on a pro-rata basis, as per regulation 11(5) of the PO Regulation. Shares were issued to
investors simultaneously, in the form of book entries credited to their CDS Accounts.

• Refunding Unsuccessful Bidders:

Bidders who bid below the Strike Price and didn't qualify for share allotment had their Margin
Money refunded promptly. Refunds commenced within three working days from the close of the
bidding period, ensuring timely reimbursement to unsuccessful bidders.
Octopus Digital Limited's meticulously structured subscription process, featuring clearly defined
timelines, minimum bid requirements, mechanisms for handling oversubscription, and a

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transparent allotment mechanism, ensured fairness and efficiency throughout the IPO share
allocation process.

LISTING & TRADING:

The Company must have to follow the rules for the listing process on the Pakistan Stock
Exchange (PSX) to become a publicly traded company. There is an overview,

Listing Process:

 The company must file a copy of the prospectus with the Registrar of the Companies Act
2017 under Section 57(1), which must be signed by the directors of the company.
 The prospectus also refers to an application to the PSX to deal with the quotation of
the shares of the company and its performance. Also, clarify the rules and procedures
to be followed in the case of formal listing applications that are not accepted by the PSX
regulatory body within the due time frame.
 If the formal listing application is not accepted or permission is not granted within the
required 21 days of the closing subscription period, the company has the right to publish
the notices in the press and claim the refund application amount under Section 69 of the
Companies Act from the applicants. Because the prospectus outlines the liabilities of the
directors of the company in case of delays in refunding the application amount to the due
course applicants,
 The listing process set by the PSX and the Companies Act by the SECP is only to ensure
smoothness and transparency in dealings or a fair listing of the company`s shares. These
strict compliances and requirements are mandatory for the listings.
 The prospectus includes the applicant amount and bid amount in the case of book
building, and it should be deposited in a separate bank account until and unless the
company has to pay it.

Listing Date:

The declaration of the listing date is held only by the formal meeting between the company and
its stakeholders, shareholders, or media as well and issues a notification on their website or an
official report to the regulatory authorities.

The listing date is important for the IPO process because it declares the date on which company
shares will be available for trade on the stock exchange.

Listing Debut:

The listing debut is primarily announced by the company and the PSX after all regulatory
compliances and affairs are met. This signals the start of trading on the stock exchange.

The company may declare the communicative listing debut through formal channels because it
provides details about the trading icon or symbol.

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The listing debut provides liquidation to the existing shareholders. The company`s opening price
of the share is based on the dynamics of the demand and supply of the market.

Trading Performances:

It covers various financial metrics and ratios for the year between 2018 and 2021.

1. Profits and Earning Ratios:

 The profit after tax has increased over the year from a loss in 2018 of 509 to 125.971in
1Q of 2021.
 The earnings Per Share has increased over the years from -5.09 in 2018 to 1.151 in 1Q
OF 2021.
 There is a downward trend in ROE from 100% in 2018 to 9% in 1Q of 2021.
 There is a declining trend in ROA, from -463% in 2018 to 8% in 1Q of 2021.

2. Margins:

 There is a percentage decrease from 100% in 2018 to 82% in 1Q of 2021 in Gross

Margin
 It has also seen fluctuations in EBITDA, from 92% in 2019 to 79% in 1Q of 2021.
 The Net Margin has remained stable at 75% in 2019 to 1Q of 2021.

Post-listing requirements:

Octopus Digital Limited is required to fulfill the requirements set by the PSX for the listing of its
shares. Following the rules of corporate governance and guidelines to ensure transparency and
accountability to the regulatory body and investors.

It is also mandatory to submit periodic financial reports (quarterly and annually) to the Stock
Exchange and PSX. Because the report symbolizes the company's financial strength and
position,

Setting up an effective board structure, independent directors, an audit committee, and an

internal quality control system to protect shareholder scrutiny. These all set high standards of
corporate governance. Communication and documentation are needed to maintain openness and
transparency between its shareholders, as well as regular analysis of performances and
strategies. Any material misstatement or fraud should be reported to the shareholders that may
impact the operations and financial results.

Octopus Digital Limited should adhere to all laws and regulations. It includes compliance with
the governance codes and securities that are imposed by the PSX.

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POST-IPO PERFORMANCE:
1) Utilizing the IPO Proceeds

Octopus Digital Limited planned to raise funds through an IPO process to build a digital
dashboard platform. Which is specially designed for manufacturing or industrial sectors?
Connections are to be made through Top ware and Omni Connect. The
amount that is generated from the IPO process can also be used for marketing and sales costs. All
these platforms are linked to each other.

2) Revenue Stream Operations

Octopus Digital's limited revenue stream is primarily operated by the After Market Support
Services, and it includes various contracts with 5-year tenure and initially serving their clients in
the Middle East and Pakistan.

3) Market and Competitors Risk

Octopus finances Microsoft Cloud and a client portfolio from Avanceon to keep the market
position with their aim and even with talented competition. And these highlight the risks
associated with the technology. And there would be a competitive advantage in building more
relations within the domestic and international markets.

4) Regulatory Risk Mitigation

Octopus faces risks with imported stock and automation spares. Duties have an impact
on every small portion of the cost—almost 16%—and are passed on to the clients. The company
deals with the duties that impact its margins and passes on changes to clients.

5) Capital Market Risk and Share Price Movement

is complete Digital Limited will list its common shares on the PSX after the IPO process is
complete because it extracts the movement of internal and external factors. The share price
will be determined by sponsor Avanceon`s track record and business record based on operational
performances and financial analysis.

And it is likely to impact the company`s stock performance.

6) COVID-19 Risk & Under-Subscription Risk Mitigation.

Octopus technology only focuses on the business model and reduces COVID-19 impacts. It also
admits the under-subscription risk and may decline the IPO process due to investors’ interest
lacking.

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7) Managing Exchange Rate Risk

To correctly detect monetary things, Octopus Digital Limited handles exchange rates through
strict accounting policies and regulations. All these methods help reduce the condition of the
company that is affected by fluctuations in exchange rates.

8) Marketing and Sales Cost

Octopus Digital Limited predicted the number of employees required for the Ips` marketing and
sales. It is mainly estimated that there will be 40 resources are needed for marketing and 55
resources for sales. Also, with pay costs for each area,

This IPO proceeds will be taken in the first and Second years. It includes the division and
creation of IPs, and marketing and sales performances quarterly with an in-depth analysis.

9) Intellectual Property Creation

Creating 29 Intellectual properties involves Human Resources like technical or software

engineers experts with an estimated average cost of nearly USD 150,000 per project.

These all-post-IPO performances and risk alleviation methods sketched by Octopus Digital
Limited give insights into how the company tries to navigate the potential challenges and show
its hold to achieve growth and success with more strength in the market post-listing.

CONCLUSION:
In conclusion, we had a comprehensive oversight of Octopus Digital Limited's journey towards
its Initial Public Offering (IPO) and post-listing strategies. We studied the crucial aspects such as
capital market risk, COVID-19 risk mitigation, exchange rate risk management, marketing and
sales cost projections, intellectual property creation, corporate governance enhancement,
valuation methods, investor presentations, media and public relations efforts, and digital
marketing strategies.
Octopus Digital Limited's proactive approach to addressing risks, enhancing corporate
governance practices, and engaging with investors showcases its commitment to transparency,
compliance, and long-term value creation. By outlining strategies for utilizing IPO proceeds,
managing revenue streams, mitigating market and regulatory risks, and fostering stakeholder
trust, the PDF underscores the company's strategic foresight and operational resilience in the
dynamic technology landscape.
To conclude Octopus Digital Limited's portrayed a great dedication towards sustainable growth,
market competitiveness, and stakeholder value enhancement. This comprehensive analysis
serves as a roadmap for understanding the company's strategic initiatives and positioning in the
evolving digital market, setting the stage for continued success and innovation in the future.

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